Frozen chickens: RM880,000 tax fraud attempt stopped at Padang Besar checkpoint

New Straits Times

a day ago

KANGAR: The Customs Department foiled a tax and halal certificate fraud attempt involving 55,572kg of frozen chicken worth more than RM880,000 after intercepting two lorries that had attempted to re-enter Malaysia late last month.
The incident occurred around 3.20pm on July 26 when officers stopped the lorries at the Padang Besar Immigration, Customs, Quarantine and Security (ICQs) Complex as they tried to re-enter the country, despite being declared as outbound to Thailand.
Perlis Customs director Ismail Hashim said the scam was detected when officers inspected the Customs declaration forms submitted by the lorry drivers.
"In this case, the parties involved misused Customs Form K1, which is meant for imported goods, by declaring the frozen chicken as imports from Thailand.
"However, earlier observations revealed that they had actually used Form K8, which is for goods in transit. The goods came from Penang and were supposedly en route to Thailand," he told reporters at the Perlis Customs office today.
He said the drivers were caught turning back into Malaysia while presenting Form K1 at the checkpoint, falsely declaring that the chicken was imported from the neighbouring country.
Ismail said the false declaration was made to obtain a 20 per cent import tax exemption typically granted to goods originating from Southeast Asian countries.
"The goods were turned around directly at the checkpoint and re-entered Malaysia. This clearly shows an attempt to evade import duties by manipulating the declaration process," he said.
Investigations also found that the origin of the frozen chicken was not Thailand, as claimed, but another Asian nation not eligible for the Asean import tax exemption.
Ismail said five individuals, including the lorry drivers, agents and the importer, have been detained to assist investigations.
"They are being probed for offences including falsifying the country of origin, attempting to evade import duties, and failing to produce valid halal certification.
"If the goods were truly from Thailand, they would be accompanied by halal certification and veterinary documents, as required by regulations," he said.
Frozen chicken imports are subject to a permit under Item 1, Part I, Third Schedule of the Customs (Prohibition of Imports) Order 2023.
The seized goods, weighing a total of 55,572kg, are valued at RM883,580, with estimated unpaid taxes amounting to RM166,716. Authorities also confiscated the two lorries involved, valued at about RM240,000.
The case is being investigated under Section 133(1)(a) of the Customs Act 1967, which carries a penalty of up to RM500,000, imprisonment for up to seven years, or both upon conviction.